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Wednesday, 20 May 1942


Mr DUNCAN-HUGHES (Wakefield) . - Like the honorable member for Fawkner (Mr. Holt), in the main I shall devote my time to clause 4, which relates to the estate duty that is payable in respect of the estates of members of the services, and to the rather wide questions which, I think, arise from the present state of war.

When this matter was raised by the honorable member for Fawkner last November, the Treasurer (Mr. Chifley) said that he had not had time to consider the representations that had been made; but he was good enough to promise to have them investigated, and, if possible, to bring down an amending bill. He now proposes in this bill to alter, the law in such a way that, instead of estates of under £5,000 being exempt, and estates of over that amount being fully hit, there is to be straight-out exemption of all estates, however large, to an amount of. £5,000. The honorable gentleman has also incorporated in sub-clause 2 of clause 4 a provision to meet the rather lamentable position that arises when an estate, owing to two consecutive deaths within a short space of time, becomes twice dutiable. Further - and this in my view is the right and handsome thing to do - the alterations are to apply from the commencement of the present war. I agree with the contentions of the honorable member for Fawkner. although he might have gone further. A fair test seems to be what was done in the last great war and what is being done in this war with respect to men who lose their lives, as members of the Navy, the Army, or the Air Force. In the last war, the following exemptions were made in respect of men who were at war, during their lives, and the estates of men who were killed while on war service : No duty whatever was levied by the Commonwealth against the estates of men who were killed in the field; they were completely exempt. In addition, from 1915 onwards, anybody who served in the field was completely relieved of federal income tax in respect of personal exertion income; and, from the time of its introduction in 1917-18, no war-time profits tax was levied against them. Those three exemptions one may describe as major exemptions; there is no half-heartedness about them. The law of the Commonwealth was, in fact, much more liberal than the then existing law in Great Britain.

What is the position in this war ? Our law is much less liberal than that of Great Britain, although the British Act remains substantially as it was in relation to the fighting services. All that Australia has done to exempt, in any sense, persons who are serving in the forces in this war, has been done, first, by the act of 1940, which is now being amended. The exemption for which provision was made in that act related only to such estates as were of a value of less than £5,000. It is not generous to say that, if a man happens to have, say, £10,000 or more, he shall be taxed on the full amount at precisely the same rates as if he was not a member of any of the fighting services, as if he had remained in Australia during the whole period of the war, and had not done a hand's turn for his country. One must congratulate the Treasurer upon having taken steps to remove that reproach at least. There is another, and, I consider, a very meagre, parsimonious provision, which the Parliament made in 1940. It was, in effect, that the pay and allowances of troops enlisted for overseas service should be exempt from income tax only from the time of their departure from Australia. That is to say, the exemption applies, as regards the Army, solely to the Australian Imperial Force; and, even so, does not apply to a man who has volunteered for service overseas, but is not sent out of Australia. That is the law as it now stands.

There appears have been almost a complete lack of consideration of the property of those serving overseas, or in any branch of the fighting services, in the present war. I have dealt with the claim to consideration of those who are serving in one of the branches of the fighting services, and I shall return to it; but, turning aside for the moment, what of the great number of persons who are taking risks as volunteers in connexion with civil defence, and what of civilians who are killed as the result of enemy ration? They are not provided for in this bill, nor are their estates to be immune from Commonwealth taxation. If a man happens to be an air .raid precautions warden, a fire-fig!hter or a person neutralizing or extracting fuses from bombs- - a particularly hazardous occupation - and is killed, the Commonwealth, under the present law, will have no option but to descend on his estate for everything that it can get. What of the great number of women now serving in a semiofficial capacity? Nurses, members of the Voluntary Aid Detachment, and women engaged in work associated with the three fighting services are spread throughout Australia and beyond the Commonwealth. The risks they run are frequently infinitely greater than those of many regular soldiers who are retained for service in Australia. Provision is made under War Injuries Compensation and Civil Defence Volunteers Regulations for compensation for war injuries sustained by such persons, but that is a minor payment, the general idea being that consideration shall be shown, mainly by pension, to the cicumstances of persons who have little or no means, in the event of injury or death. I shall read a portion of a letter which I have received from the president of the Taxpayers Association of New South Wales. I do so, not because I think that the views of that gentleman will strengthen my case in the eyes of the Minister, but because I consider that what he has writtenis very fair. He states -

It is the opinion of ray association that the concession proposed should be extended in the following directions -

(i)   by granting to members of the fight-' ing forces who die as a result of active service an unconditional and complete exemption from estate duty;

(ii)   by extending some exemption to civilians whose death arises from enemy action.

In regard to members of the forces it is felt that the sacrifice made by the person who gives his life in defence of his country is such that it is inappropriate to levy any duly upon his estate. The State of New South Wales allows an unconditional exemption in these cases and during the last war an outright exemption was allowed by the Commonwealth.

So New South Wales has set an example to the Commonwealth Parliament in this respect. In a subsequent place my correspondent writes -

In regard to civilians who may lose their lives as a result of enemy action we would suggest that the same principle of " windfall revenue" applies. If hostilities reach our shores it is not unlikely that there will be a heavy death-roll amongst the civilian population, with the result that the Government would stand to collect duties perhaps many years before such estates fall to be charged.

There is also the position of civilians engaged in " front line " activities as for exable air raid wardens, ambulance drivers, Red Cross officials and the like who, while facing the hazards of war. are not covered by the amendment proposed.

It is almost inevitable that this matter will be brought to the attention of the Government again before long through the pressure of events. Personally, I agree with the honorable member for Fawkner (Mr. Holt) that some provision should be made for civil defence volunteers and others who have been, or may be, killed. A recent air raid on Darwin resulted in the death of civilians. They were killed by enemy action. Millions of us who are not in Darwin have hitherto escaped, but is it to be suggested that civilians in Darwin arc to be wiped out of existence without the Commonwealth recognizing in any way the misfortune which they suffered ? If they happen to be well to do, is the Commonwealth to out in and get as much (revenue as possible because of their lamentable death, which in some cases was caused by the fact that they were doing something for their country? That would be quite unreasonable.

I agree with the last speaker that the practice in Great Britain is very fair. This proposal is on similar lines, but we could properly go farther and adopt the provision in the British measure which has regard to the expectation of life. That provision was put into operation in Great Britain throughout the last war, and is still a part of the British law. That suggests at least that it has been found to work reasonably and equitably. In Great Britain estate duty is not imposed on estates up to the value of £5,000. Beyond that value the expectation of life is calculated, and there is a corresponding deduction from the duty that would ordinarily have been paid. The honorable member for Fawkner gave to the House some interesting figures on this matter in November last. He pointed out that the normal duty payable in respect of an estate of £10,000 in Australia would be £300, whereas, if calculated on the British method, the duty would be only £40. On a £20,000 estate, the duty in Australia would he £1,200 and in England £239, whilst on a £50,000 estate the duty in Australia would be £6,000, and in England £1,435. I believe that a man is none the less worthy of consideration because he happens to have more money than the average citizen. Presumably, it is no easier for a wealthy man to give up his life than it is for a poor man. The deceased's family is entitled to some consideration from the fact that he has given his life for his country, and this consideration should weigh all the more in Australia where we still have, in theory, and partly in fact, the voluntary system of recruiting. For my part, I believe in conscription. I do not believe that the voluntary system can be fairly applied, but it is our policy at the moment, and surely it is unwise to discourage men, whether rich or poor, from offering their services. Is this war any less important to Australia than was the last war? The conditions which, during the last war, applied to the members of our fighting services on duty overseas are beginning to apply more and more to the men now serving in Australia. Perhaps the Treasurer will be able to give reasons for treating our fighting men more meanly in this war than was done in the last war, but I can see no reason for it. It may he argued that our commitments are greater now because more men are serving, and that we cannot afford to be generous, but such an argument would not come well from a Government, which has just introduced legislation to extend great social benefits to a great many people who, no matter how deserving, cannot possibly have as strong a claim on our consideration as have the members of the fighting forces. Therefore, I intend, when the bill is in committee, to move an amendment to provide that the expectation of life, section of the English act be incorporated in this measure.







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